The December jobs report was much more disappointing than expected.
U.S. companies added just 74,000 payrolls. Economists were looking for 197,000.
It appears that the unusually cold weather played a big role.
Here’s Bloomberg’s Shobhan Chandra: “More than a quarter million Americans were not at work because of inclement weather, the most for any December since 1977, the Labour Department said. Employers may be awaiting further evidence that the economy is accelerating before they step up the pace of hiring… Inclement weather may have played a role in depressing payrolls during the month. The figures showed 273,000 Americans weren’t at work because of weather.”
While December was unusually cold, it was also unusually dry. As a result, economists were divided on whether weather would play a major role in hiring.
On Wednesday, the ADP employment report showed a surprisingly strong construction labour market that added 48,000 jobs.
However, today’s BLS report showed that the sector actually lost 16,000 positions.
It seems we’ll have to wait for upcoming revisions to see exactly what happpened in December.
The Wall Street Journal’s Justin Lahart tweeted this historical look at the weather’s impact on the BLS numbers.